The Financial Accounting Foundation’s failure to propose creation of an independent standard-setting board to modify GAAP for private company financial reporting “profoundly disappointed” the American Institute of Certified Public Accountants, Barry Melancon, AICPA president and CEO, said in response to the Oct. 4 announcement.

Instead, FAF proposed a council whose decisions are subject to ratification by the Financial Accounting Standards Board. The FAF announcement was in response to the report of the Blue Ribbon Panel on Standard Setting for Private Companies, which supported the creation of an independent standard-setting board.

“Three thousand private company constituents and a majority of the state CPA societies, representing more than a quarter million CPAs, have spoken,” Melancon said. “They want a separate independent standard setting board and they have sent letters to FAF asking for change.”

AICPA Chair Paul Stahlin, vowed that the profession will keep fighting for an independent board. “We will continue to ask our members and others who support more relevant, more cost beneficial standards for private companies to make their voices heard load and clear that the best answer is an independent private company board,” he said.

“Over the years, FASB’s main focus has understandably been on the needs of constituents of publicly traded companies,” Melancon said. “The pent up frustration we are witnessing by the private company constituency is a direct result of that public company focus and not seeing that differences can be and are appropriate for private companies and their financial statement users.”

Information and resources to help you understand FAF’s proposal and offer you the opportunity to easily and quickly send a comment letter to FAF using an online tool will be available soon on the private company financial reporting resource page on the AICPA website.